2020: The Perfect Storm for Bill of Lading Fraud
As reported in the press, global banks were stunned in 2020 by a series of commodity trader collapses after instances of fraud were exposed during the pandemic crisis. Many banks put their trade finance divisions under review as they sought to recover billions of dollars in debt. In July 2020, the Global Trade Review reported fraud claims, including fabricated bills of lading, suspicious transactions, and the loss of $192 million, made by the French bank, Natixis, and Malaysian bank, CIMB, against oil trading conspirators, Sugih Energy and Hontop Energy, respectively.
The COVD-19 pandemic has forcibly highlighted the practical limitations of paper bills of lading and other physical representations of critical documents. If banks, which are considered some of the most highly regulated and secured establishments, lack protection from a growing number of vulnerabilities, how do other organizations and businesses with fewer resources protect themselves from document fraud in the digital era?
Fraud is increasing as the volume of online data is growing, thus expanding information exposure, making it extremely challenging to preserve confidence.
What security measures need to be applied to support digital document transactions?